Potential Problem

1.Introduction

It is generally known that a good system is the important part of an organization. It can make the work life be more convenient and efficient. Obviously, the potential problem that Builders Warehouse is facing is the deficient and chaotic system has brought many problems. Thus the main purpose of this report is to analyse the reason that to design, implement and maintain a single new integrated system across the whole organization will be the most important thing to be considered.

2. Reasons

2.1 Different need of information

It's important that managers in different level need different information to accomplish their duty. The sources of information have two types-internal information sources and external information sources. Internal information source can be cash budget, cash flow statement which can reflect the situation of a organization more directly. External sources can be government policy, market trend, customer behaviour that outside of the organization but can effect the situation of the organization. There are three levels of management-Strategic,Tactical and Operational.

Strategic managers are the most senior managers within an organization. For example, brothers James and Peter Stewart are strategic managers of BW. These managers are involved with formulating strategies, setting organizational goals and objectives for the company. Any decisions made by strategic managers are likely to affect the whole organization. Decision-making will be very unstructured in that they often have to use their own judgement when making decisions. Thus managers in this level will need the information of profitability, investment and market trends. So Cash Budget, Trading,Profit and Loss Account and marketing researches will be the resources of informations they need.

Tactical managers are middle management and these managers are responsible for ensuring that the goals set by strategic managers are achieved, like Jackie Spence, the Information Technology Director of BW. They do this by deciding on which tactics to use in order to achieve organizational objectives. Decision-making by tactical managers is likely to be semi-structured in that some of the decisions made are guided by statistical facts and figures or historical information. However, there is still an element where these managers have to rely on their own judgement. So they need information from Cash Flows, Budgets and also some marketing researches.

Operational managers are the first line of management responsible for the day-to-day running of each department, like managers of distribution centers in BW. They will make decisions in the very short term and any decisions made are guided by organizational policy and procedures, therefore decision making at this level does not normally require the manager to use his/her own judgement. They responsible for routine activity, monitoring, ensuring effective use of resources, staffing levels and absence recording. Therefore they need information of every week, every day even every second. Thus they will pay more attention to the internal information of the organization. And sales and customer satisfaction are two resources of information they need.

2.2 Great information systems

2.2.1 ERP

Enterprise resource planning (ERP) systems integrate internal and external management of information across an entire organization--embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc. ERP systems automate this activity with an integrated software application. The purpose of ERP is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders.

ERP provides support to upper level management to provide them with critical decision making information, like Strategic managers. This decision support allows the upper level management to make managerial choices that enhance the business down the road.

It can greatly improve the quality and efficiency of a business. By keeping a company's internal business process running smoothly, ERP can lead to better outputs that benefit the company such as customer service, and manufacturing.

It also creates a more agile company that can better adapt to situations and changes. It makes the company more flexible and less rigidly structured in an effort to allow the different parts of an organization to become more cohesive, in turn, enhancing the business both internally and externally.

2.2.2 DSS

A decision support system (DSS) is a computer-based information system that supports business or organizational decision-making activities. DSSs serve the management, operations, and planning levels of an organization and help to make decisions, which may be rapidly changing and not easily specified in advance. Decision support systems can be either fully computerized, human or a combination of both. It can not only imply to Strategic managers but also Tactical managers.

There are benefits of DSS as follow:

Improves personal efficiency

Speed up the process of decision making

Increases organizational control

Encourages exploration and discovery on the part of the decision maker

Speeds up problem solving in an organization

Facilitates interpersonal communication

Promotes learning or training

Generates new evidence in support of a decision

Creates a competitive advantage over competition

Reveals new approaches to thinking about the problem space

Helps automate managerial processes

Create Innovative ideas to speed up the performance

2.2.3 EIS

An executive information system (EIS) is a type of management information system that facilitates and supports senior executive information and decision-making needs. It provides easy access to internal and external information relevant to organizational goals. It is commonly considered a specialized form of decision support system (DSS). It will be better to support to Tactical managers.

There are benefits of EIS:

Easy for upper-level executives to use, extensive computer experience